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These 4 Dow Stocks Boosted Their Dividends the Most in 2013

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Dividend investors routinely turn to the Dow Jones Industrials for stock ideas, given that every single one of the Dow's 30 components pays a dividend. But even within the blue-chip index, you can find big differences in the way that companies establish their dividend policies. With nearly 2,900 stocks in the broader U.S. stock market raising their dividends in 2013, let's take a look at the Dow components that treated their shareholders the best last year.


Source: Tax Credits, Flickr.

Cisco Systems topped the Dow dividend-growth list by one measure, as its $0.68 per share in dividends during 2013 represented a massive 55% gain over the $0.44 per share in its four previous payments during 2012. The company has gone from zero to hero in the dividend world in an extremely short amount of time, having paid its first dividend less than three years ago. Despite substantial competition in the networking industry, Cisco's sizable earnings give it plenty of room for further dividend increases, even though it sports an impressive 3% yield right now.


Home Depot raised its dividend by more than 34% in early 2013 and sustained that higher payout throughout the year. Combined with a massive $17 billion stock repurchase program initiated about a year ago, Home Depot has allowed investors to participate in the big gains it has enjoyed in recent years. Moreover, as the housing market continues to pick up steam, the home improvement retailer's growth opportunities only look more attractive, potentially opening the door to further dividend increases in the near future as it seeks to improve on its 1.9% yield.

Visa has a lot of catching up to do on the dividend front, as it yields just 0.7% even after some impressive payout growth recently. In its most recent quarter, Visa implemented a 21% dividend increase, bringing its total dividends paid over the past year to $1.39 per share. That's more than 40% higher than it paid in 2012, yet dividend investors have every right to expect much more from the credit card network giant in the future -- even though the card industry in general tends to be tightfisted with its dividend policies.

UnitedHealth Group falls into a similar category as Visa, with the company's latest efforts only bringing its yield up to 1.5%. The health insurer's 32% dividend increase in mid-2013 brought its total payouts for the year to just more than $1.05 per share, up from $0.80 per share in 2012. Uncertainty about the impact of the Affordable Care Act didn't hold back UnitedHealth's stock from impressive gains, and with the company outperforming many of its peers in terms of efficiency, UnitedHealth is building the foundation for solid dividend growth in the future.

The Dow is a smart place to look for dividend-growth stocks, but you have to look for the best opportunities. With so many smart stocks to choose from, the best selections could have a big impact on your total returns.

Why you can't ignore dividend growth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

The article These 4 Dow Stocks Boosted Their Dividends the Most in 2013 originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Cisco Systems, Home Depot, UnitedHealth Group, and Visa. The Motley Fool owns shares of Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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